International Airlines Group (IAG), the parent company of British Airways and Iberia, has announced that it has made an offer to acquire a 100 percent stake in Vueling, the Spain based low cost carrier.
The company currently owns a 45.85 percent stake in Vueling and has made an offer to acquire the rest of the stock for €113 million, for an offer price of €7 per share.
IAG chief executive officer, Willie Walsh, said, ‘With its leading position in Barcelona, European growth strategy and low cost base, Vueling has much to offer IAG. It has significantly increased capacity while remaining profitable, despite the Spanish economic slowdown, and already has extensive commercial arrangements with Iberia. We would plan to retain the current Vueling management team.
This would be good news for Vueling as there are many advantages for the airline in this deal. It will benefit from the financial strength of a larger airline group, making it better able to compete with other airlines and invest in new customer products and services. The airline will also be able to generate some cost and revenue synergies as part of IAG mainly through joint financing and procurement.
This acquisition would be positive for Spain. We would retain Vueling’s Barcelona base and create new Spanish jobs.’
Veloz Holdco SLU, a wholly owned subsidiary of IAG, has made the acquisition offer.
Earlier, IAG had reported a 2012 third quarter operating profit of €270 million, compared to €363 million reported for the same period in 2011. Passenger unit revenue has increased by 9.1 percent for the 2012 third quarter.